FOR anyone who seeks to understand Southeast Asia, the
French historian and doyen of Southeast Asian studies, G. Coedes’
classic treatise, The Indianized States of South-East Asia, is a
highly recommended reading. Coedes describes much of Southeast Asia and
Indochina as ‘Indianized’ states, where two great civilizations of
Asia, the Chinese and the Indian, merge and converge in unique harmony.
Coedes calls this area ‘Farther India’: ‘From Burma, Malaya
peninsula and the island of Sumatra, the western face of Farther India is
turned toward the Indian Ocean.’

The same thought, in a different context, is echoed by
historian K.M. Panikkar, who in his brilliant exposition, India and the
Indian Ocean, speaks about the ‘influence of the Indian Ocean on the
shaping of Indian history.’ For Panikkar, the geographical ‘imperative’
of the Indian Ocean – and indeed the Himalaya in the North – has
conditioned and shaped the history and civilisation of this subcontinent.
‘The importance of geographical path on the development of history is
only now receiving wide and general recognition,’ he says.

T

hat Southeast
Asia has always been an integral part of the Indian consciousness is borne
out by the fact that the countries of Southeast Asia so comprehensively
embraced Buddhism in all its aspects. This spiritual and cultural affinity
became an inseparable part of their ethos and way of life. Successive Indian
kings and kingdoms from the first century AD and even before to the
beginning of the 15th century, had regarded Southeast Asia and the lands
lying beyond as vital for their own strength, security and sustained
development. This intricate and abiding web of relationships in turn
contributed significantly to India’s sense of security in an extended
neighbourhood in which India is neither seen as an alien power nor as a
country with a colonial past. The relationship spanning nearly 2500 years
was founded and nurtured on mutual interest and security in which both
partners constantly enriched and reinforced each other.

The advent of the British in India and the struggle for
influence between European powers that ensued all over Southeast Asia,
suspended the continuous interaction that had existed between India and the
region. Southeast Asia itself was carved up into areas of influence by the
major colonial powers, viz., the British, French, Dutch and Portuguese.
India’s cultural and commercial interaction with this region was therefore
subordinated to the political and strategic considerations of the great
powers. This left the ‘Indianized’ states of ‘Farther India’ free to
nurture, develop and evolve a distinct cultural personality of their own,
albeit heavily influenced by their long association with India and China.

I

ndependent
India, preoccupied with pressing domestic and other problems, took time to
revive its age-old and all encompassing links with Southeast Asia. The end
of the war and the decolonisation process in Southeast Asia, in turn, sucked
these countries into the very core of the Cold War, leaving them totally
submerged in its power play. In fact, many of these countries, for
geopolitical and strategic reasons, were left with no choice other than to
align with one or the other of the two superpowers in their quest for
elusive security and promise of prosperity and development.

In the Cold War context, non-aligned India was perceived
by the West as being inimical to its interests. Therefore, its Southeast
Asian allies were discouraged from taking a non-partisan view of India and
building independent relations with this neighbouring country. Not that
India was immune from the vortex of Cold War politics. Our own close links
with the erstwhile Soviet Union and an independent non-aligned foreign
policy were sufficient reasons for the West to project and perceive India as
tied to the apron strings of the erstwhile Soviet Union and to be viewed
with a great deal of reserve and suspicion. The net result of this was that
India and Southeast Asia drifted further apart, their relations lacking in
substance, renewal and content.

For a brief period in the mid and late 1960s after the
Sino-Indian conflict and emergence of China on the international scene, some
Southeast Asian states did endeavour to explore the possibility of drawing
India into their fold, as a possible partner in the context of their
concerns over the lengthening Chinese shadows in the region. The tentative
suggestion to invite India to become a member of the Association of South
East Asian Nations (ASEAN) mooted by some had to be seen in the context of
ASEAN’s own concerns and perceptions at that time of possible expansionist
designs and the threat of subversion from communist China. The events in
Indonesia and China’s increased presence and profile in Indochina caused
some consternation in Southeast Asia and possibly beyond. The creation of
ASEAN in 1967 was also in response to this prevailing perception.
Unfortunately, India was neither prepared nor in a mood to join this nascent
grouping of Southeast Asian countries. Consequently, an important
opportunity to renew and develop strong and abiding links with the countries
of Southeast Asia was missed.

F

rom then on, the
hiatus in India-Southeast Asia relations continued unabated. India was
perceived by many as too close to the erstwhile Soviet Union for any
meaningful partnership. India’s policy towards Cambodia, when we were one
of the few countries to support and recognize a Soviet backed government in
that country, caused an enormous setback to our relations with other
Southeast Asian countries. For Southeast Asia this was a test of India’s
objectivity as a leader of the non-aligned movement. That India chose, for
her own valid and compelling reasons, not to take what was regarded as an
objective position, has not been forgotten by most Southeast Asian leaders,
scholars and opinion makers.

India’s efforts to normalise relation with ASEAN, both
bilaterally and as a regional association, met with limited success in the
late ’80s. It is against this background that Prime Minister Narasimha Rao
came to power and took some bold and far reaching initiatives to restore
normal relations with ASEAN and the countries of Southeast Asia. His ‘Look
East’ policy was well calculated and thought out. He saw the end of the
Cold War as an opportunity to broadbase India’s relations and to focus on
countries which were our traditional, and long standing friends of special
importance to India.

S

outheast Asia,
under the ASEAN umbrella, had already become one of the new growth areas:
countries like Thailand, Malaysia, Singapore and even Indonesia were making
rapid strides. They were variously being described as newly industrialised
countries (NICs) and success stories. In the mid ’90s, after joining ASEAN,
Vietnam also showed what was possible given pragmatic policies and the right
opportunities. ASEAN, in short, was seen as a model for India to emulate.
ASEAN had also become a rapidly growing source of investments, technology,
trade and tourism for India (Table
1). It was impossible for India not to
take note of this dynamic region which offered a real opportunity and a new,
diversified option.

ASEAN too, surfeit with capital and exportable goods and
technology, was looking for new markets to further its growth prospects.
Many ASEAN heads of states had declared their intention of making their
countries members of the ‘richman’s club’ by 2020. This vision needed
to be translated through a pragmatic foreign policy in regard to potential
partners – China, and more recently India, for obvious reasons, being on
top of the list. ASEAN found it of great interest to launch a ‘Look West’
policy of its own, primarily focusing on India.

The early ’90s were a propitious time for India to
vigorously launch and pursue a policy of intensifying, deepening and
expanding relations with the countries of Southeast Asia. At the same time,
in some ASEAN quarters, there were still lingering reservations about India’s
reliability as a partner in view of the entrenched perception that India had
failed the ASEAN countries during their most trying times. Mindful of the
difficulties that existed about opening up, Narasimha Rao first wanted to
dismantle the barriers and create a climate of confidence between India and
Southeast Asia. His first visit abroad outside the Indian subcontinent,
after becoming prime minister was planned to Thailand, the closest ASEAN
neighbour.

The Thais took their own time to respond to this
initiative but when the Rao visit eventually took place in April 1993, it
was a resounding success. Both countries agreed to expand bilateral linkages
in trade, investments, joint ventures, education, HRD, culture and at the
people to people level. In a symbolic gesture, which was deeply appreciated
by the conservative Buddhist society of Thailand, visa fees was waived for
Thai monks visiting India on pilgrimage. An India Study Centre, the first of
its kind, was inaugurated by the prime minister at the prestigious Thammasat
University and academic links were intensified. It was decided to increase
slots for Thai students desirous of pursuing studies in India, research
proposals were identified for implementation, political level dialogue
between two countries was initiated, and an ambitious trade target agreed
upon.

B

riefly, Rao
succeeded in opening new avenues for evolving a mutually beneficial
partnership with Thailand. He was received by the King of Thailand and given
an audience for nearly two hours, a rare gesture. In my view, much credit is
due to Rao for his foresight and vision that led to our Look East policy of
which he was the unquestioned author and architect. He also made several
short visits to other ASEAN countries during the next few years. This gave
impetus and substance to the rapidly growing bilateral relations with ASEAN
which was reflected at the regional level in India’s evolving links with
ASEAN. He directed that special attention be paid to strengthening and
deepening bilateral relations with ASEAN countries recognising that at the
regional level it is the sum total of bilateral interaction which would make
us a desired partner.

India’s Look East policy, to a great extent, was
propelled and conditioned by the difficult economic situation in the country
in the early 1990s. India had unfortunately missed the first wave of
economic reforms in the late 1970s and 1980s and failed to benefit from the
ongoing process of globalisation. Our economy was under great stress and
strain and needed an infusion of new ideas, economic reforms, capital,
technology, a large dose of investments in socio-economic infrastructure and
modernisation. India’s domestic and regional economic space was too
constrained for a large country like ours to grow in a rapidly globalised
world economy.

An obvious and natural extension of India’s economic
space, it was perceived, was ASEAN which in the 1980s had emerged as a
significant and promising growth area of the world. With a combined
population of nearly 400 million today and a land area larger than India’s,
ASEAN’s GDP is in the region of US $ 400 billion; its exports, already
significant, have grown steadily and are in the region of US $220 billion;
it is an important destination for foreign investments and a major source of
investments abroad.

In so far as India is concerned, in less than four years
from 1992, our two way trade has more than doubled; in 1996-97, it stood at
US $ 6 billion and a target of US $ 15 billion set for the year 2001 seemed
attainable. From negligible investments in 1992, investment approvals from
ASEAN upto 1997 were in excess of US $ 5 billion (Table
2). In the reverse
direction, ASEAN accounts for a significant proportion of Indian investments
abroad. Significantly, the region has emerged as a promising growth area in
trade, investments, joint ventures, tourism, etc. The potential for
increased cooperation, though immense, is largely untapped.

Just as for India ASEAN has emerged as a major economic
space, for ASEAN too India has emerged as an attractive destination for
export of goods, services, technology and capital. Faced with growing
difficulties in accessing and sustaining growth in traditional markets, both
players see opportunities to develop a mutually beneficial partnership.

The recent financial crisis in Southeast and East Asia,
in fact, should have been seen as an opportunity for enhanced economic and
commercial interaction. Unfortunately, India was slow to appreciate the
nature and extent of the crisis and failed to make use of this opportunity
to explore new avenues of partnership. While China and the other major
regional powers not only demonstrated solidarity with ASEAN by providing
financial support (bailout package) as also specific bilateral cooperation
measures, India did not come up with any meaningful proposals.

The crisis could have hastened and helped ASEAN
investment flows and trade with India: In the end, ASEAN investments and
trade with India actually decreased (see tables). Yet another missed
opportunity! The crisis, happily, seems to be ending now with ASEAN and East
Asian countries ‘exporting’ their way out of trouble. India will have to
look to the future by taking advantage of the expected sustained recovery of
the ASEAN economies in the coming years.

I

t is precisely
this rationale that hastened the process of India being invited to become a
sectoral dialogue partner of ASEAN in 1992 and, thereafter, in a relatively
short period being elevated to full dialogue partner status in 1996. Many
ASEAN leaders openly conceded that they found India’s participation in
their activities very useful. The four areas of cooperation, viz., trade,
investment, science and technology and tourism have since been enlarged and
given content through the setting up of working groups on trade and
investments and science and technology.

A notable feature of cooperation in trade and investment
is a study of India-AFTA (Asean Free Trade Area) linkages aimed at exploring
enhanced trade and investment opportunities. Simultaneously, at the level of
business and industry, an ASEAN-India Business Council (AIBC) and an India-Asean
Economic Cooperation Committee (AIECC) have been functioning. Direct
meetings between the business entities and industry associations of the two
sides have been held regularly. The working group on science and technology
has registered notable successes and joint programmes have been evolved.

The setting up of an ASEAN-India Informatics Centre at
India’s initiative and through Indian funding has opened up a potentially
important area for Indo-ASEAN cooperation. The other areas of enlarged
cooperation include human resource development, people to people contact,
tourism and cultural and academic exchanges. That all this has been achieved
in a short span of 5-6 years speaks for itself and demonstrates that both
India and ASEAN look at this evolving partnership with hope and expectation.

India has also participated as a full member in the Asean
Regional Forum (ARF) since 1996. ARF is an ASEAN driven regional security
forum which has as its members all the ASEAN countries and the major
non-regional powers including the U.S., Russia, China, Japan, EU, Australia,
Canada and India (there are at present 21 members). India’s participation
in the ARF meetings has largely been unspectacular though quietly pragmatic.
It has given us an opportunity to understand in the changed context ASEAN
perspectives on strategic issues having economic and political ramifications
as also explain our perspectives on major regional and other issues.

T

he ARF is not a
security forum or an alliance; it is a forum for exchange of views and
consultations among member countries. India is able to have a dialogue with
her extended neighbourhood partners with a view to moving forward
incrementally in building trust and understanding each others security
concerns. The opportunity of having bilateral meetings on the sidelines of
ARF has been particularly useful in so far as India is concerned. For
example, at the recently concluded Singapore ARF meeting, India’s foreign
minister was able to talk with the foreign ministers of the U.S., China,
Australia, Japan, E.U. and the ASEAN countries who now have a much better
idea of India’s concerns and perspectives.

ARF has also demolished the Cold War myth of India-Pak
‘parity’ in the eyes and calculations of major powers. India comes to
the ARF as a major power and is now seen outside the prism of Indo-Pak
equations as a distinct emerging power centre which is responsible, able and
willing to play a constructive role consistent with its regional and global
interests. India’s decision, announced at Singapore, to support the ASEAN
nuclear free zone is at once a reflection of this reality and India’s
geopolitical interests in this important neighbouring region. Likewise,
India’s views and concerns on issues like terrorism and its nexus with
drug trafficking, dangers of extremism and fundamentalism and the restraint
exercised by India in the Kargil conflict have all found ready resonance in
the ARF forum.

W

hile our Look
East policy was undoubtedly well conceived, articulated and successfully
implemented in the early years, there are signs that we may be loosing the
momentum and consequently a historic opportunity. Our bilateral relations
with the 10 members of the ASEAN, though trouble free, have not yet evolved
into a meaningful partnership in which both sides have a vital stake. ASEAN
trade and investments in India, after an initial spurt, have stagnated, in
part because of ASEAN’s own preoccupation with the financial crisis in the
region, but also largely due to its disillusionment with India’s daunting
procedures, requirements and an unresponsive bureaucracy. India’s trade,
likewise, has not lived up to the promise of the early 1990s when bilateral
trade with Thailand alone had exceeded US $ 1 billion and was growing at a
healthy 25% per annum.

The ‘flagship’ ASEAN companies which had hoped to
make India their hub for future operations are apparently having second
thoughts and have slowed down their involvement. The now abandoned Tata-SIA
airline project and the project to build a new airport at Bangalore for
which a consortium of ASEAN and Indian companies had made a bid, are cited
as examples of India’s inability to benefit from ASEAN capital, technology
and entrepreneurship even in a priority area like infrastructure. These two
cases, more than anything else, have been responsible for a change in
perception about India among ASEAN investors.

T

he list of
proposals that have not materialised even after protracted negotiations,
delays and waiting is too long to be recounted and does make potential
investors wonder whether India is in fact serious in promoting foreign
investments and joint ventures. The damage has been incalculable and will
take a long time to correct. One of the biggest problems facing ASEAN
investors is their inability to comprehend and come to terms with the maze
of India’s multi-layered administration and business practices. It must be
candidly pointed out that India’s private sector too has been unable to
respond adequately to the challenge. India’s joint venture partners
generally look to the immediate future and short term gains in establishing
partnerships.

Another related problem is our inability to identify and
propose projects particularly in the infrastructure sector and indicate the
terms on which these are being offered to foreign investors. There is a
suggestion of non-transparency in our approach. ASEAN’s interest in some
road and highway projects is a case in point. The result has been that major
ASEAN investments in India have been slow to take off. In many cases
proposals have been abandoned (for example, a major fishery project). We are
now left with small projects in relatively low priority areas. They will
move along only because they are too small to call for new policy
initiatives or effort. In this climate it is difficult to visualise how
ASEAN investments will prosper in the foreseeable future. These, however,
are early days. Perhaps both sides will weather the difficulties and remain
on course for the promise which the future holds.

H

ere it is
pertinent to remark that the ASEAN model is of special relevance and
interest to India. Inspite of the remarkable progress they have achieved,
ASEAN countries are still at a developing stage, lacking a self-sustaining
industrial and human resource base needed to propel and sustain a high
growth economy. At the same time their experience in managing reforms,
liberalisation and coping with globalisation holds many lessons for India.
Many of them are today well integrated with the global economy and able to
manage the socio economic fallout and negative effects of globalisation.
ASEAN experience in evolving modern banking and financial structures is also
noteworthy (notwithstanding the recent crisis in Southeast Asia and the
collapse of some leading financial institutions).

There are other areas too in which the experience of
ASEAN is relevant, for example, investments in education, primary health,
population control, poverty alleviation, environmental protection and
building of the socio-economic infrastructure to sustain economic growth. It
is a model that we might profitably study and emulate with appropriate
changes. Indeed, the evolution of ASEAN itself brings out many lessons for
regional cooperation under SAARC and shows how to achieve incremental
progress towards harmonising and integrating our economies to mutual
advantage.

ASEAN has successfully experimented with growth areas and
identified and evolved synergies and complementalities. Today, it is poised
to optimise its potential not only through individual effort of its members
but also by effective regional and global cooperation. Its future vision is
not dissimilar to our own for a prosperous SAARC. While comparisons are
sometimes invidious there is always scope to profit from each others
experiences.

Our Look East policy in recent months has also stalled
because of a preoccupation with domestic problems. Few visits have been
exchanged between India and ASEAN. There has been no head of
state/government level visit in either direction in 1998 (there were five or
six such visits in 1997). Exchanges at other levels have also dried up.
There are, evidently, no new initiatives on the anvil at the government or
Track II level. ASEAN, though preoccupied with its own crisis, seems to have
momentarily relegated relations with India to the backburner. Their
disillusionment with India has only made things slide further. This hiatus
must be corrected if Indo-ASEAN relations are to move forward.

A

dmittedly,
governments cannot do everything; their primary responsibility is to create
propitious conditions and provide a policy and administrative framework
conducive to promoting partnership. The private sectors of the two sides
have an equal responsibility. Here Track II has a special responsibility to
come up with new ideas and initiatives. Unfortunately, there is at present
no Track II forum in India to play this role. The entire civil society,
including business leaders and operators, academics, media persons, opinion
moulders, cultural personalities and the government must play their part in
reviving the stalled Look East policy.

Apart from forging and strengthening abiding links with
ASEAN in pursuit of her Look East policy, India will also need to take a
fresh look at the opportunities of partnerships in the Asia-Pacific region
as a whole. This region, which includes such strong and vibrant economies as
Japan, China, Taiwan, Korea, Australia and Hong Kong, already accounts for
over 40% of our economic exposure and is both strategically and economically
important to India. The APEC (Asia-Pacific Economic Community) extends from
the Pacific coast of the Americas to Australasia and includes the whole of
Southeast Asia, thus bringing India in the ‘footprint’ of this region.

R

ecognising this,
India has not only given importance to diversifying and developing bilateral
economic linkages with these economies, but has also sought to become a
member of APEC. This, unfortunately, has not yet materialised, though India
qualifies both in terms of geographical location and an ability to
contribute to the development of the Asia-Pacific region. However, it is
significant that in 1997, India did succeed in becoming a participant in two
of the APEC working groups, viz. on energy and industrial science and
technology. However, at the APEC summit meeting held in Canada in 1997, a
moratorium on inducting new members was imposed. India should use the
intervening period to comply with the criteria and requirements for
membership and intensify bilateral economic links with the countries of the
region.

Unfortunately, as in the case of ASEAN, we seem to have
lost momentum and our participation in the working group meetings so far has
either been extremely purposeless or simply proforma. There is little
awareness of the significance and benefits of APEC membership. It must be
pursued seriously through intensified lobbying with member countries and by
regularly placing it on the agenda of our high level political dialogues
with important member countries like the U.S. and Japan.

T

here are many
within APEC who continue to harbour reservations about India’s ability to
participate effectively in the forum; there are others who believe that
India’s compliance with APEC and WTO requirements is unsatisfactory. There
are also those who are reluctant to bring India into the fold for fear that
India may distract attention by bringing up extraneous issues. Our diplomacy
will have to dispel such doubts. India’s goal should clearly be to first
become an effective member of all the three working groups and thereafter to
pursue membership by demonstrably complying with the rules of the ‘APEC
club’.

India’s non-inclusion in the Asia-Europe (ASEM)
dialogue is also most unfortunate. India is at the heart of Asia and a major
economy and a political power; her absence from this forum makes little
sense. Here again, entrenched perceptions of the members of ASEM about India
are, apparently, a stumbling block. Indian diplomacy will have to work hard
to ensure that India’s case does not go by default.

In pursuit of our extended neighbourhood policy, in 1997,
India had made a good beginning in sub-regional cooperation with some
immediate neighbours in the Bay of Bengal region. This nascent cooperation
arrangement involving two countries of ASEAN, viz. Thailand and Myanmar and
three countries of SAARC, viz. Bangladesh, Sri Lanka and India, called
BIMSTC, was meant to explore and optimise cooperation in trade, transport,
tourism and infrastructure by developing sub-regional linkages and
synergising opportunities on the basis of mutual advantage and
complementarity.

This is a sound approach and needs to be pursued more
actively. Here again, our authorities have failed to grasp the importance of
sub-regional cooperation and follow up on some agreed upon arrangements at
the 1997 meeting of BIMSTC ministers. Our initial response to such proposals
as the setting up of a regional airline, shipping service and connecting the
region by a road network has been hesitant and slow. The other sub-regional
SAARC grouping involving India, Bhutan, Nepal and Bangladesh, has also
failed to take off effectively.

T

he approach
based on evolution of growth areas and sub-regional cooperation had proved
successful in Southeast Asia and elsewhere. India must make better use of
these emerging opportunities to compete in a complex environment. India has
no choice but to adopt a multi-layer approach to benefit from her
geographical location at the meeting points of the Indian and the Pacific
Oceans and the vast hinterlands spread on both flanks of India.

Both Coedes and Panikkar were, in fact, referring to this
civilisational and geographical advantage which not only gives India a
unique opportunity but also makes it imperative for her to pursue an
extended neighbourhood policy. It would be in consonance with Indian
history, geography and traditional links with friends and partners in the
region who have enriched each other for thousands of years. This, in
essence, is the rationale and imperative of our Look East, extended
neighbourhood policy.